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Telecom Forecast to be One of the Highest IT Spending Industries

Dollar SignTelecom will be one of three highest IT spending industries between now and 2019, according to new research from IDC. The other big spenders will be banking and discrete manufacturing. IT spending in each of the three industries will account for more than 8% of all spending over the forecast period.

Process manufacturing, federal/central government and professional services will follow as the next three largest industry verticals. The information comes from the latest version of IDC’s “Worldwide Semiannual IT Spending Guide: Vertical and Company Size” report.

Highest IT Spending Industries
Global healthcare industry IT spending will have the fastest growth among vertical sectors, however, IDC says. The researchers expect healthcare IT spending to rise at a 5.5% CAGR over the five-year period.That is in keeping with the results of an IDC survey of U.S. healthcare providers released earlier this week that revealed that 40% plan on increasing IT budgets.

Overall, IT spending will rise from $2.46 trillion to $2.8 trillion globally from 2015 through 2019. North America (U.S. and Canada) will account for the largest share of the IT spending pie, doling out more than $1 trillion in 2017, IDC predicts.

“IT spending will be heavily influenced by economic cycles and wild cards over the next five years,” IDC VP, Customer Insights and Analysis Stephen Minton cautioned, as “the global economy enters a new and uncertain phase.” He cited economic sluggishness in China, now lows in oil prices and stock market volatility’s effects on investment as contributing factors.

Very large businesses with more than 1,000 employees will account for 40% of overall spending from 2015-2019, IDC says. IT spending among the 70 million-plus small businesses (1-9 employees) worldwide will account for about 25%, while IT spending among medium (100-499) and large (500-999 employees) businesses will grow fastest, posting CAGRs of 4.4% and 4.8%, respectively.

Drilling down deeper across categories of technology, IDC expects software spending will grow fastest, at a 6.7% CAGR for the five-year period. Healthcare and financial services businesses will be the biggest growth drivers, followed by business services, where IDC predicts IT spending will increase at a 6.2% CAGR. IT spending growth will be lower in hardware and IT services than in the overall market, IDC says.

Spending on Hardware and Software
Overall, hardware will remain the largest IT market segment technologically speaking, however, with spending on devices, infrastructure and telecom hardware accounting for about 40% of global IT expenditures for the period. Spending on telecom hardware, such as smartphones, will account for more than half of the total.

Spending on PCs will remain significant despite a five-year CAGR decline of 1.6%. IDC expects to see strong growth in enterprise infrastructure spending, fueled by demand for storage and servers.

“Organizations from all industries and of varied sizes are investing in a combination of customer-facing initiatives, enterprise-focused projects, and 3rd Platform technology adoption and advancement,” Jessica Goepfert, IDC Program Director, Customer Insights and Analysis, was quoted.

“To truly capitalize on this opportunity, vendors would be well served to not only listen to their strategic clients’ feedback but also to respond and react accordingly. Knowing the client’s industry is table stakes. In order to become more embedded in their customers’ businesses and make a significant impact, the conversations between vendor and client must change to be process and outcome focused.”

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